Nottingham Forest’s appeal to overturn a four-point deduction has been unsuccessful following a hearing by an independent commission.
The Premier League club was handed the four point deduction after being found to have breached Profit & Sustainability Rules (PSR). The club posted losses of £34.5m over the three-year threshold of £105m.
Forest challenged the charge and proceeded to appeal, with an independent commission appointed by the Premier League in March to oversee the process.
Despite pleading its defence during a hearing on 24 April, along with an early plea agreement and according to The Athletic, “excellent cooperation”, the independent commission ultimately decided to uphold the four point penalty.
With the docked points now taking effect, Forest stands three points from 18th placed Luton Town, but just one place away from the relegation zone.
Whilst this leaves the club in a precarious position, Forest will need a win against Chelsea in its next fixture to strengthen its chance of remaining in the Premier League next season, with the club having a superior goal difference to Luton.
The initial investigation from the Premier League over PSR breaches stems from Forest’s promotion to the top-flight in 2022. The club then went on to sign over 40 players, spending up to £250m since the summer of 2022.
This proliferation of player signings was in large part due to Forest having a substantial amount of players on-loan from other clubs whilst competing in the EFL Championship. It was also in part to establish itself as a regular Premier League team for years to come.
However, in order to comply with PSR’s £105m loss threshold over the three-year period, Forest was seeking to sell its former player Brennan Johnson to get under the loss threshold.
Whilst the club sold Johnson for £47.5m to Tottenham Hotspur, the sale was not completed until 1 September 2023, months behind the late June deadline for clubs to report losses to the league.
Forest argued that selling Johnson earlier in the summer transfer window would have meant it would have received a transfer fee a lot lower than what they had sold him for.
Everton were initially handed a 10-point deduction over similar PSR offences this season. However, the club was successful in its appeal and its deduction was lowered to six.
Both Forest and Everton officials have been highly critical of PSR and the surrounding infrastructure. This has led to the league aiming to completely rehaul the rules.
Proposals under the potential new PSR have included a spending cap, which will be accompanied with an anchoring system. This has been reportedly unanimously agreed upon by clubs, with three rejections and one club abstaining from voting. A luxury tax has also been discussed.
The Premier League is expected to announce the new PSR in its next Annual General Meeting in June.
